China was known to be very advanced in its state-owned cryptocurrency system, called Digital Currency / Electronic Payment (DC / EP). The first tests have barely been launched, and these are already impressive figures just revealed by a senior executive at the People’s Bank of China (PBoC).
Already 1.1 billion yuan exchanged thanks to the DC / EP
At the Sibos 2020 Banking and Financial Conference, the Vice Governor of the People’s Bank of China, Fan Yifei, reported on the DC / EP pilot tests, conducted in 3 major Chinese cities.
According to the central banker, 113,300 digital wallets for individuals and 8,859 for businesses were opened among those residing in the cities of Shenzhen, Suzhou and Xiong’an, in order to test this new digital yuan.
According to Fan Yifei, quoted by the Chinese newspaper South China Morning Post, the pilot programs have made “positive progress”.
This would be 6,700 use cases (bill payment, transport, government services, etc.) that would have been implemented. There have already been more than 1.1 billion digital yuan trasacted, or about 162 million U.S. dollars.
3.13 million transactions processed for Chinese cryptocurrency
The representative of the PBoC insisted on the importance of setting up central bank digital currencies (CBDCs) to counter the revolution brought by cryptocurrencies:
“To protect fiat currency from crypto-assets and preserve monetary sovereignty, central banks need to digitize banknotes using new technologies (…). The PBoC sees the digital renminbi as an important financial infrastructure for the future.”
Fan Yifei then completes the excellent figures of the DC / EP tests, which began in April 2020. In less than 6 months, this experimental system has managed to process 3.13 million transactions.
And this is only the beginning. China’s CBDC trials have now been extended to the capital, Beijing, the Yangtze River Delta region, Tianjin, Hebei and Guangdong provinces, as well as the cities of Hong Kong and Macau.
In development since 2014, the Chinese DC / EP system already impresses with its processing power. There remains the problem of centralizing such a CBDC, but that is a whole different subject. One thing is certain in any case: China is now very well placed to be the first major economic power to officially launch its digital currency.